Re:Central Banks and Disintermediation
by SuoDuanDao on Wednesday January 27, 2021 @07:33AM
(#25927426)
I think the basis for that pretense is that every digital intermediary can compete with every other digital intermediary, unlike a human intermediary who can only effectively compete with other human intermediaries in the same geographic area. This causes very different effects on pricing. It's probably premature to say that it will drive the profit margins of the intermediaries almost to zero, but that is one possible outcome.
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Margin is a bit of a nebulous concept.
Computers can help bring down costs. Competition can help force companies to pass on those savings.
(Though even in the absence of competition, there is some incentive to lower prices in order to increase volume. But it's much weaker. See eg https://en.wikipedia.org/wiki/Monopoly_profit)